Johnston Press may sever link with its founding family

Is Johnston Press about to sever its link with the family that founded the publisher in the 18th century?

It certainly looks that because the last member of the Johnston family is, ominously, "in consultation" about his future with company.

Michael Johnston, currently the divisional managing director for its Scottish and north-east division, is one of three senior executives discussing their futures.

The Scotsman, a Johnston Press title, reveals that David Caskie, the division's finance director, and Richard Bell, managing director of Johnston Falkirk, are also in talks with senior management.

Ashley Highfield, the relatively new chief executive, issued a statement confirming that the talks were taking place.

Johnston Press was founded in Falkirk in 1767 as a printing business, acquiring its first paper, the Falkirk Herald, in 1846.

It kept its headquarters in that town for the following 150 years, renaming itself F Johnston & Co in 1882.

The family's last major force in the company was the loveable, ever-smiling Freddie Johnston, now 77. He ran his company in traditional family-owned fashion, seeking to meet every employee at least once a year.

Though the company gradually expanded, it wasn't until it was floated on the stock exchange in 1988 that it went on an astonishing acquisition spree, buying up newspapers across Britain and Ireland courtesy of giant bank loans.

Its high point, buying Scotsman Publications in 2006 from the Barclay Brothers, came at a very high price indeed.

Now, with more than 250 local and regional newspapers, the company is in the doldrums. With a share price of just 6.5p, it has a market capitalisation of about £42m.

But Highfield, in an interview last month, pointed out that the company is turning a profit of more than £70m on revenues of £400m. And most of its titles have profit margins of more than 20%.

He believes that more consolidation within the industry is necessary and that Johnston Press should be acquiring more.